Oregon Historical Society faces grim future

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Susan Pizzolato, of Wareham, Mass., makes her way through The Oregon Historical Society exhibit on Oct. 22, 2010 in Portland, Ore. . The Oregon Historical Society is proposing a levy to help out the museum. Executive Director George Vogt says the society will tear through its dwindling cash reserves by the end of 2011. That, he says, is why the society is asking Multnomah County residents to rescue it through a proposed five-year levy. (AP Photo/The Oregonian, Thomas Boyd)

When Oregonians want to touch a covered wagon from the Oregon Trail, see an exquisite Native American basket or look at a photograph taken decades ago that puts them face to face with the state's wild and woolly history, there's one place to go: the Oregon Historical Society. But this 111-year-old caretaker of Oregon's past might not have a future.

Executive Director George Vogt says the society will tear through its dwindling cash reserves by the end of 2011. That, he says, is why the society is asking Multnomah County residents to rescue it through a proposed five-year levy.

While no one interviewed disputes the society's value to the state or the importance of documenting Oregon history for future generations, many question how the society has used its money -- for example, the society has paid a lobbyist $77,000 since 2008 -- when individuals, businesses, nonprofits and other state programs have to live with less.

Though it serves and covers the entire state, Vogt says the society is asking Multnomah County residents to pay for the levy because the society's library and museum facility is downtown and most people who use it are Portlanders. If it passes, the levy will tax county residents a nickel per $1,000 of assessed valued. For a $200,000 home, that means $10 a year.

Vogt, who became director in late 2006, says the financial problems predate his tenure. But the tension, he says, is simple: The state has broken its commitment based on a 1979 Oregon statute to fund the society, whose website claims a 78 percent loss in state support.

"When I came here, we got lucky," Vogt says, about funding levels after he arrived. "But who could predict the economy falling off the cliff? It's been a confluence of accidents and best hopes and wishes of the board and our dogged determination to try to provide the state with the best we could give."

While the statute doesn't offer specific requirements of state support or caveats for a recession, an examination of state appropriations since the society's founding in 1898 reveals the state has consistently funded the society. In the past 20 years, the society has averaged $510,109 a year in state appropriations, or about 14 percent of its current $3.7 million budget. This year, it received $492,000, about 13 percent of its budget.

Other figures and records indicate Gov. Ted Kulongoski has been an aggressive champion of the society, even during recessions. In the 2007-08 biennium, the society received $2.8 million, its largest state appropriation ever. In the 2009-10 biennium, it was awarded $625,000, a huge drop from the previous biennium but still the largest award from the state to any arts, culture or heritage program in the two recession-strapped years.

All told, the $3.4 million given to the society for those four years amounts to 27 percent of all state funding to arts, culture and heritage programs for that period. The figures don't include separate donations from the Oregon Cultural Trust and the city of Portland.

Vogt argues the figures are deceptive. He says Oregon compares unfavorably with other states in terms of funding its heritage institution. Moreover, from 2003-06, the society received nothing from the state because of another recession, neutralizing the gains of subsequent years and forcing layoffs and budget cuts that have gutted staff and programs.

Financial documents provided by the society and other sources back up the claim that it is in crisis mode. The society's $3.7 million budget is down from $7 million for 2005.

But many wonder why the society was reeling on the financial ropes in the first place.

Separate reviews of the society's finances were conducted this year by the offices of Secretary of State Kate Brown and Portland Mayor Sam Adams, and the American Association of Museums conducted a re-accreditation assessment. The reports examined financial and other aspects of the institution. While the tone and specificity of the reviews varied, each had the same conclusion: The society needs to create long-term strategic and budgeting models that address changes in state funding.

The reviews by the city and state agencies likely won't affect the society -- they're not audits -- but the association's review could have consequences. The association sets standards of good practices in the museum world, and because the society hasn't developed "an adequate overall institutional plan that will help address the museum's financial reality," the association deferred the society's re-accreditation until it solves the current crisis.

"The past decade has been a downward spiral of eliminating programs to the point where we've lost almost all of our intellectual capital," says board member Jackie Peterson. "And we have to get it back."

"The state doesn't have funding," says Chet Orloff, the society's director from 1991-2001. "Where do you come up with it? That's when you have to get creative."

Brown's review also noted that by 2015, the society will have a $2.6 million balloon mortgage payment due on its Gresham property, where it stores most of its collection. It's not clear how the society will make that payment.

"It's easy, retrospectively, to say we should have done this or that," says Vogt, who will earn $164,800 this year and received a $16,000 bonus in 2008. "But, realistically, in 2003, the board felt that the zero funding from the state wouldn't last. And that, in 2005, funding would come back. That didn't happen."

Vogt says that's why the society has spent so much time chasing public-funding sources, including the proposed levy, and why the society hired its own lobbyist more than two years ago. Since September 2008, the society has used money from its budget to pay Mark Nelson $3,500 a month for each of the 22 months he lobbied for the society. Nelson, who previously campaigned on behalf of the tobacco industry, is currently not working on the levy campaign or any other project for the society.

Still, hiring Nelson was an unusual step for a cash-strapped institution, especially since Oregon cultural institutions, including the society, already are represented by a lobbying group in Salem, the Cultural Advocacy Coalition.

To run the campaign for the proposed levy, the society formed a separate political action committee and hired political consultant Liz Kaufman to run it. The campaign is expected to cost a few hundred thousand dollars, Vogt says, and is being funded by contributions, like all political campaigns.

Vogt says it's not clear what voters will do on Nov. 2. But if the levy is successful, Vogt believes Oregonians will be rewarded -- the extra money will be used to expand core services, including service hours at a library that has been an invaluable resource to scholars and curious history lovers.

Should the levy fail, Vogt says, the society likely will begin a phased shutdown. Very few options are left, he says, even with $20 million in assets, including outright ownership of an entire block on the South Park Blocks.

Pictures from our front porch of the Stout Fire from Sutherlin on the evening of July 30, 2015. Later in the evening after the moon rise, the effect of the smoke from the fires in Douglas County on the moon.